If you were asked to choose a mascot for the real estate industry, what would you choose? If I was asked, I believe I would have to choose the Ostrich, specifically the image of it's head buried in the sand. The entirety of the real estate industry is under siege and all of our trade associations are silent, our big brands are talking about what cool technology they have, brokers are worried about turf wars, and agents seem oblivious to what is going on.
What is going on? Wall Street is pumping billions into big tech and data companies who are targeting the commissions that brokers and agents make their livings. One of their newest weapons is the iBuyer programs where they will be able to control the market by controlling the listings. They want to either buy the listings, or if not, identify who wants to sell then sell that lead to "preferred" agents at 35% today and an every escalating percentage as they get agents hooked on the model.
The new CEO of Zillow has openly admitted that his goal is to tighten down his Zestimate model to go from the absurd numbers they are known for, to their actual offer to buy anyone's home. Their goal is that you go to your house Zestimate and then you can click and they will buy your home then and there. Zillow is only one of the many sharks in the water of iBuyer. If agents understand this threat they don't participate in the online chats and threads about it, from there it is amazing how little is understood in our industry. Of course, if agents are depending upon NAR or their local boards to explain it, no wonder they have no idea what is going on. From what I have seen agents dismiss this out of hand. However, the big players like Realtor.com partnered with opCity, Redfin just partnered with Open Door to try to combat it. So, those most tuned into the big data are most engaged in what they see happening.
Maybe the trade associations and big brands are all mute because of the ongoing lawsuits against our cooperative agreements with NAR. Maybe their attorneys have told them to stay quiet, but this is a poor time to be silent, it is a time to "go to the mattresses." We are in a war if we realize it or not. Now the Department of Justice is also involved looking into the NAR agreements as well. If you don't think it is having an impact look at what it has done to REALOGY's stock. REALOGY is the largest real estate company in the world, they own Coldwell Banker, Century 21, ERA, Sotheby's and Better Homes and Gardens, and as of last week you could buy a share of their stock for the same price as a drink at Starbucks for 5.75 per share, 70% lower than last year.
Okay, those may be the problems, what are the solutions for an agent that doesn't have billions to invest to fight Wall Street? The answer is vitamin "C." At the Detroit Economic Club in 1999, Michael Dell, spoke on the Three "C's" of E-Commerce. Those three "C's" are just as relevant today as they were in the infancy of the Internet. Those three C's are what is required for a successful business model.
First "C" is Commerce - You must have a business that has products or services that people want, are willing to pay for, and are willing to pay the price you need to sell.
Second "C" is Content - You must have a client user friendly process, where it is a pleasure to do business with you, not inconvenient or a hassle but an experience that they enjoy, will be willing to do again and to recommend to others.
Those two are required for ANY business.
Third "C" is Community - This is the one that Dell said NO ONE on the Internet has figured out, I would now say other than Social Media. The key to Community is that once you attract a client from where ever, how do you continue to engage and stay top of mind. How do you get through the noise. It is 500% less expensive to maintain a client relationship than to acquire a new one.
As an industry we have allowed this attack on us by allowing our practices to become transactional. We, as an industry, spend 94% of our marketing budgets in lead acquisition, then once transaction is over move on to the next one. This makes us vulnerable to the big data giants taking away our businesses. Also as an industry we mistakenly believed that our only value was our data and guarded it from the consumer, that breech of understanding is the very thing that allowed Zillow and others to move in between us and our own clients. However, all we have to do to inoculate ourselves from that is focus on Community.
We need to make ourselves THEIR Trusted Advisor, their Go To Expert, Their Advocate that they wouldn't think to go without. How do we do this? First we have to have systems in place that guarantee that we provide a great experience with our Commerce and Content phase. Then we need to be accessible and experience based not only throughout the process of their transaction, but from then on. We need to be engaged with them forever. They need to hear from us through a multimedia approach at least 33 times per year forever. The big Data will not be able to compete with this, they can do automated drips, which we will also use, but they won't talk to them on the phone, take them for coffee, invite them to client appreciation events. Doing this approach means you have to offload a lot of what you are doing today. If it is not talking to a client or negotiating for a client, it should be someone else doing it. In other words, you need systems that keep you out of day to day activities and free you up for high priority, low urgency, business development.
If this sounds good, but you have no idea how to get there, let me know. We have developed systems that you can plug into that will take care of 60-70% of your touches and all of your high urgency transactional activities. This way you will have your Vitamin "C" to ward off any sort of Zillow infection for your business.
